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Original Title: Regulatory Voice Stabilizes Market Confidence, Bond Market Recovers
Source: Securities Times
Reporter Sun Xiangfeng
Confidence in the credit bond market is gradually recovering. On Monday, the credit bond market ushered in long-lost warmth, and many bonds rallied sharply. Institutional staff believe that the continued voice of the supervisory authority has sent a signal to resolutely protect the interests of investors, which will help to further restore market confidence.
The bond market rallied
The credit bond market rallied on Monday and many bonds rallied strongly. Wind data shows that a number of bonds issued by Tsinghua Holdings rose sharply, of which “17 Qingkong 01” closed at 54.01 yuan, up 49.12%. Due to excessive short-term profits, the Shanghai Stock Exchange suspended trading of “17 Clearing Control 01” from 9:30 yesterday and resumed trading at 2:57 p.m.
Also, 3 animals, including “17 Jizhong 01” and “16 Jizhong 01”Jizhong EnergyTheir bonuses were up more than 20%. “19 Steel Union 03” was up 13.27%.
The aforementioned bonuses have fallen dramatically before. On November 19, “17 Qingkong 01” plummeted 30.79%, and on November 20 it plummeted 39.63%, with a cumulative drop of 58.22% in the two days.
At the close of yesterday, the main 10-year contract rose 0.28%, the main 5-year contract rose 0.22% and the main 2-year contract rose 0.07%.
There has also been a steady trend in funding and market sentiment has clearly improved. An institutional trader in Shanghai told a Securities Times reporter that with the gradual restoration of confidence in the credit bond market, the difficulty of credit bond lending has been reduced significantly.
The data shows that overnight interbank loan products registered 1.8565%, a decrease of 11.55 basis points; seven-day products registered 2.2339%, a fall of 2.02 basis points. The interbank committed repurchase of 1-day varieties registered 1.8356%, a decrease of 9.01 basis points; the 7-day varieties 2.1508%, a reduction of 5.55 basis points.
In the news, Yongmei’s breach of contract has made further progress. At approximately 4:00 PM on Monday, Yongcheng Coal and Electricity announced that it will hold a “20 Yongmei SCP003” headlines meeting in the evening to discuss the issuer agreement to redeem 50% of the principal, and the remaining principal will be will extend for 270 days. The interest rate will remain during the extension. Without change, a single payment of principal and interest upon maturity and exemption of the proposed default of the bonds for this period. If the proposal is approved, the issuer will first redeem 50% of the principal of the ultra-short-term financing bills in the current period and redeem the remaining principal with a deferral.
On the same day, Yongcheng Coal and Electricity also announced that due to multiple factors, such as the impact of the epidemic, the company’s operating pressure and the financing difficulties of the bond market, the company’s liquidity problems have caused that ” 20 Yongmei SCP004 “and” 20 Yongmei SCP007 “failed. Cash in full on time. “19 Yongmei MTN001” will pay interest on November 30. The total issue of this period of bonds is 500 million yuan, and the interest rate of this period of interest is 5.8%.
Regulatory voices, market confidence restored
The market analysis considers that the recent frequent occurrence of defaults in the bond market, and the successive defaults of Brilliance, Yongmei, etc. They have had a greater impact on the bond market, and a large number of credit bonds have been canceled. The convening of this meeting of the financial committee is inadequate to reinforce the confidence of the markets.
Before this, on November 18, the Merchants Association issued the “Notice on the additional strengthening of the commercial standardization of the issuance of debt financing instruments”, in which it was clarified that the issuers will not directly or indirectly subscribe instruments debt financing issued by themselves and that require further strengthening of self-discipline Management and punishment. On November 20, the China Securities Regulatory Commission took regulatory action against Brilliance Automotive Group Holdings Co., Ltd. and related intermediaries.
“These actions fully demonstrate that regulatory authorities attach great importance to protecting the legitimate rights and interests of investors, and have a ‘zero tolerance’ attitude towards all types of violations of laws and regulations.”CITIC valuesMingming, deputy director of the Institute, said in an interview with a Securities Times reporter that the supervisory authority had spoken at a critical moment and market confidence was restored, prompting a rebound in the credit bond market.
Another institutional person pointed out that the timely voice of the Financial Commission is conducive to stabilizing market confidence, which in the short term will alleviate panic and gradually return to rationality. Considering that there are more individual bonds that were mistakenly eliminated in the initial stage, there is a playing space for investors; for issuers, the intensive cancellation of the issuance of new bonds will also be alleviated.
It is worth noting that market participants generally believe that while current risks are under control, all parties in the market should not forget the lessons learned by default.
“Against the backdrop of the default turmoil by some SOEs and investor confidence, it is intended to prescribe the proper medicine, establish the important position of credit in the bond market from top to bottom, and inject momentum to investors in bonds In the process of market reform, gradually break the rigidity Redemption is what it should be, but it is definitely not an excuse for the issuer to “borrow the donkey” to maliciously evade debt by transferring assets or embezzlement, nor is it a shield for intermediaries to provide convenience, “Mingming said.
He said that this time the regulatory authorities emphasized multifaceted supervision to strictly prevent the occurrence of systemic risks: outside the industry, various departments cooperate to investigate risks; Within the industry, employees are governed by professional ethics and their respective legal organizations further regulate bond issuance, rating and other processes to promote Bond market information is symmetrical. It is inevitable that “faith” is market oriented and there will be pains. In the process of breaking out of the bond market, defaults will still occur. In the long run, perfecting the basic bond market system and getting rid of bonds in default with commodification and the rule of law is still the way to break the situation.
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